HM Treasury

ECOFIN: 16 June 2017

Mr Philip Hammond: A meeting of The Economic and Financial Affairs Council (ECOFIN) was held in Luxembourg, on 16 June 2017. EU Finance Ministers discussed the following items:Early morning sessionThe Eurogroup President briefed ministers on the outcomes of the 15 June meeting of the Eurogroup, where consensus was reached on a short-term solution for Greek debt re-structuring and fiscal targets. Commissioner Moscovici also gave a presentation on the euro area economy in which he flagged the ongoing political risks faced by the euro area.Reduced VAT rate for electronically supplied publications (e-Publications)The Council discussed the proposal for a Council Directive amending the VAT Directive as regards VAT rates applied to books, newspapers and periodicals. The proposal could not be adopted due to the lack of unanimous agreement. The incoming Presidency will decide on the further handling of this file.General Reverse Charge Mechanism The Council were invited to reach a general approach on the proposal for a General Reverse Charge Mechanism which will allow Member States to shift liability for VAT payments from the supplier to the customer, under certain conditions. The proposal could not be adopted due to the lack of unanimous agreement. The incoming Presidency will decide on the further handling of this file.Strengthening of the Banking Union / Risk-reduction measures Under this item, the Council agreed the general approach on a proposal for a Directive amending the Bank Recovery and Resolution Directive (BRRD) as regards the ranking of unsecured debt instruments in insolvency hierarchy. General approach was also agreed on the proposal for a Regulation amending the Capital Requirements Regulation (CRR) as regards the transitional period for mitigating the impact on own funds of the introduction of International Financial Reporting Standards (IFRS) 9 and the large exposures treatment of certain public sector exposures denominated in non-domestic currencies of Member States. The Presidency also presented a progress report on the Capital Requirements Regulation, the Capital Requirements Directive, the Banking Recovery and Resolution Directive, the Single Mechanism regulation, and the European Deposit and Insurance Scheme.Current financial services legislative proposalsThe Presidency informed Council of the state of play of legislative proposals in the field of financial services.Non-Performing Loans (NPLs)The Presidency gave an update on the work of the Financial Services Committee’s sub-group on NPLs. The sub-group’s report on NPLs will be presented to July ECOFIN.Fight against the financing of terrorism (Commission Action Plan)The Commission provided an update to Council on implementation of the action plan on the prevention of terrorist financing, including progress to agree revisions to the fourth anti-money laundering Directive.Capital Markets Union (CMU): Mid-term reviewThe Council received a presentation from the Commission on the mid-term review of the CMU action plan, published on 8 June.Contribution to the European Council meeting on 22-23 June 2017: European Semester 2017The Council approved draft Country-Specific Recommendations (CSRs) on the economic and fiscal policies of Member States. These will be submitted to the June European Council for endorsement.Implementation of the Stability and Growth PactThe Council adopted Council Decisions and Recommendations in the context of the Excessive Deficit Procedure, closing the excessive deficit procedures of Croatia and Portugal, and the Significant Deviation Procedure, recommending Romania correct a significant deviation from the adjustment path towards its medium-term budgetary objective.


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ECOFIN: 23 May 2017

Mr Philip Hammond: A meeting of The Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 23 May 2017. EU Finance Ministers discussed the following items:Annual EIB Governors meetingThere was a meeting of the EIB Governors preceding ECOFIN. This entailed a speech by the EIB President Werner Hoyer, a Governors discussion and approval of the Audit Report. Early morning sessionThe Eurogroup President briefed ministers on the outcomes of the 22 May meeting of the Eurogroup. Ministers then discussed the current economic situation. Dispute Resolution MechanismMinisters agreed the general approach to the proposal for a Council Directive on Double Taxation Dispute Resolution Mechanisms in the European Union. The UK supported this measure. The Proposal aims to establish a common dispute resolution regime for EU taxpayers at risk of double taxation. Common Corporate Tax Base Ministers held an orientation debate on the Proposal for a Council Directive on a Common Corporate Tax Base (CCTB). The CCTB Proposal suggests establishing a common set of rules across the EU for calculating companies’ taxable profits. Current financial service legislative proposalsThe Council Presidency provided an update on current legislative proposals in the field of financial services. Movement of CapitalMinisters had an exchange of views on a report by the Economic and Finance Committee (EFC) on the movement of capital and the freedom of payments, and a report by the European Commission on accelerating the Capital Markets Union. European Semester 2017Ministers endorsed Council conclusions on the in-depth reviews of macroeconomic imbalances in certain Member States carried out by the European Commission as part of the Macroeconomic Imbalance Procedure in 2017. The UK was not subject to an in-depth review in 2017. Follow-up to the G20 Meeting of Finance Ministers and Central Bank Governors on 20 April 2017 and of the IMF and World Bank Spring meetings on 21-23 April 2017 in WashingtonThe Presidency and the Commission informed ministers on the outcomes of the G20, IMF and World Bank meetings.


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Department for Exiting the European Union

General Affairs Council June 2017

Mr Steve Baker: My Rt Hon. friend, Baroness Anelay of St Johns DBE, Minister of State for Exiting the European Union, has made the following statement:The General Affairs Council (GAC) met in Luxembourg on Tuesday 20 June 2017. It was the last GAC under the Maltese Presidency. I represented the UK.The main items on the agenda were: preparations for the June European Council on 22 and 23 June; the eighteen-month programme of the Council; the European Semester; and Inter-institutional agreements with reference to the Commission’s Work Programme.A provisional report of the meeting and the conclusions adopted can be found on the Council of the European Union’s website at: http://www.consilium.europa.eu/en/meetings/gac/2017/06/20/Preparation of the European Council, 22 to 23 June 2017The Heads of the EU’s 28 Member States, the European Council President and the President of the European Commission assembled at the European Council meeting on 22 and 23 June 2017. To prepare for this meeting, the General Affairs Council examined the second draft of conclusions on the proposed agenda items for the European Council. The agenda included: Security and Defence; Migration; the Paris Climate Accord; Jobs Growth and Competitiveness; External Relations; and Digital Europe.On Security and Defence, the discussions at the General Affairs Council focussed on the European Defence Fund and Permanent Structured Cooperation, to enable Member States to develop capability on security and defence matters. Ministers also discussed counter terrorism proposals.On Migration, the Council discussed: internal migration; external migration; measures to address the Central Mediterranean route: and the need to work with countries of origin.On Jobs, Growth and Competitiveness, the Council debated how to secure free and fair trade: the use of defence instruments. Ministers also discussed their ambitions for the single market; the Capital Markets Union; the services sector; and the Digital Single Market.Ministers were informed that during the external relations discussion, the President of the European Council and the President of the European Commission would update the European Council on recent meetings and summits and leaders would reaffirm their commitment to the Paris Climate Agreement.I intervened to thank colleagues for all the messages of support after the recent terror attacks in London and Manchester. I confirmed that the UK was broadly content with the language on defence but that the proposals on counter terrorism should go further to include references to data retention as a vital tool to fight terrorism.I underlined the need for a strong EU commitment to free trade and also supported all those who called for ambition and implementation on services, the Digital Single Market and single market strategies.Eighteen-month programme of the CouncilThe Council endorsed, without any deliberation, the eighteen- month work programme devised by the incoming Estonian, Bulgarian and Austrian Presidencies of the Council of the European Union. The programme will run from 1 July 2017 to 31 December 2018.European SemesterThe Council approved the country specific recommendations of the European Semester, which is the EU’s cycle of economic and fiscal policy coordination, for endorsement at the June European Council.Inter-institutional agreementsMinisters had a brief exchange of views on the proposals for the 2018 Council Work Programme. The proposals will be formally introduced with the publication of the Commission’s Letter of Intent on 13 September.The UK also lifted its reservation on the Mid-Term Review of the Multiannual Financial Framework that had been in place during the purdah period and the file was adopted.


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Ministry of Justice

Justice and Home Affairs Post-Council Statement

Dominic Raab: My noble friend the Justice Lords Spokesperson (Lord Keen QC of Elie) has made the following Written Statement."A meeting of the Justice and Home Affairs Council took place on 8 and 9 June in Luxembourg. The Council took place on the day of, and the day after, the General Election. I represented the UK for Justice day. The UK’s Permanent Representative to the European Union, Sir Tim Barrow, and Shona Riach, Home Office Europe Director, represented the UK for Interior day. Justice day The Council agreed a number of proposals without discussion on Justice day, including a number of Council Conclusions on areas including returns, children in migration and information exchange and information management including interoperability solutions. Justice day began with the participating Member States agreeing a General Approach on the European Public Prosecutor’s Office (EPPO) under enhanced cooperation. The UK has always been clear that we will not participate. A General Approach was achieved on the Supply of Digital Content Directive. However, some concerns on a specific article remained; trilogues under the Estonian Presidency are likely to come back to these issues. I expressed the UK’s support for the Presidency’s compromise.There was a policy debate on the European Commission (Commission) proposal for a provision on hearing the views of the child in parental responsibility cases arising from the Brussels IIa Regulation. There was broad support for such a provision. The Commission urged Member States to make progress as it would help resolve the problem of refusal of recognition and enforcement of judgments on the basis that the child had not been heard. The UK agrees that refusal of recognition and enforcement of judgments is a problem but I asked that Member States keep options open going forward, rather than committing to a provision now.For the Insolvency Directive, the Presidency presented the Maltese Presidency’s paper on the role of national courts in restructuring procedures and the principle that debtors should remain, in whole or in part, in possession of their business. The UK supports the Directive and I welcomed the direction of travel on both issues. The Presidency concluded that Member States had shown support on both issues and work would continue at the technical level.There was then a discussion on the Money Laundering Directive, for which a General Approach was achieved. The UK has not opted in to this proposal. The Presidency reached a General Approach on the recast of Regulation 45/2001, which regulates the processing of personal data by EU institutions and bodies, and was being re-cast to bring it in line with the wider EU data protection package. As the proposal has not yet cleared parliamentary scrutiny in the UK, I did not give a position. Over lunch, EU Ministers discussed ways of countering illegal hate speech online. The Commission updated the Council on the second progress report on cooperation with internet service providers. EU Ministers expressed support for the Commission’s work in this area. The Government views cooperation with internet service providers as an important step in the collective work to reduce harm caused by hate online, and I suggested producing a toolkit to help small platforms to apply the same standards as bigger providers. After lunch, at the start of a joint session of Interior and Justice Ministers, the Council held a one minute silence to remember those killed and injured in the Manchester and London Bridge terrorist attacks. I then provided an update on the attacks. I noted the quick and effective response from our emergency services and that the investigations were ongoing. I also thanked Ministers for the many messages of condolence, and stressed the need to work together to combat radicalisation and deprive extremists of safe spaces to operate online.The Council then moved on to discuss Criminal Justice in Cyberspace, covering e-evidence, data retention and encryption. For e-evidence, the Commission presented a number of practical measures as well as possible legislative approaches for improving cross-border access to electronic evidence. The Government agrees we must be able to bring to justice cross-border crimes planned, facilitated or committed online irrespective of where the electronic evidence is stored. I underlined the importance of this agenda, in particular for bringing terrorists to justice and set out practical action which could help. The Presidency concluded that the Commission should continue to seek expert input whilst developing legislative proposals. For encryption, the Commission presented an update on the challenges caused by end-to-end encryption for law enforcement, as well as the technical and legal issues. For data retention, the Presidency provided a brief update on discussions held so far in the Friends of the Presidency group on Data Retention. The Government has played a leading role in the group and fully supports these discussions as a way of building an evidence base for the necessity of retention. The final discussion on Justice day was focussed on safeguarding children involved in irregular migration to Europe across the Mediterranean. EU Ministers agreed that protecting children at all stages is a priority and endorsed the need for a comprehensive approach to migration. Interior day Interior day began with the agreement of a General Approach on the European Travel and Information Authorisation System (ETIAS). As the UK is not part of the border control aspects of the Schengen agreement, it will not take part in this proposal. This was followed by a policy debate on the Second Generation Schengen Information System (SIS II) proposals. There was broad agreement among EU Ministers that the SIS II could be used for entering preventive alerts on children at risk of abduction and disappearance, with the caveat that clear definitions were needed. There was also some support from EU Ministers on the creation of a new alert on the SIS II for ‘inquiry checks’ against suspected criminals or terrorists. There was then a general discussion on actions to address the migration crisis, with a focus on the EU-Turkey agreement and the Central Mediterranean. Member States were encouraged to take an active role in implementing the Malta Declaration. Over a working lunch focused on Counter Terrorism, there was a progress update on the work of the Counter Terrorism Group followed by a presentation of fiches on data sharing with EU agencies from Counter Terrorism Coordinator Gilles de Kerchove. There was also a discussion on proposals to bring together the various European bodies responsible for countering radicalisation, including the Radicalisation Awareness Network and the European Strategic Communications Network. The afternoon session began with a debate on key operational practices and obstacles of returns policy and the use of visas as leverage. It was concluded that Member States would need to work together on returns and readmission and that the next step would be to look at where and when leverage should be used. There was then a discussion on Information Systems and Interoperability, following the final report of the High Level Expert Group on data sharing (HLEG). The HLEG’s priorities were highlighted, including a shared biometric matching service and a common data repository, while the need to improve data quality, implement PNR and improve cooperation with Europol and Interpol were common themes in discussion. Finally, there was an update on negotiations on the seven legislative proposals on the Common European Asylum System. Of these measures, the UK has only opted in to the recast Eurodac Regulation. Over both days the Estonian delegation set out their priorities for their Presidency of the Council of the EU, which begins in July. The fight against terrorism and serious crime will continue to be a priority. ECRIS will remain a priority file, as will criminal justice in cyberspace and data retention. The incoming Presidency will prioritise safeguarding Schengen and free movement in the face of terrorism and mass migration, meaning that the asylum package, the Valletta Action Plan, returns, and the Blue Card Directive will be priority files, as will work on radicalisation, interoperability of EU information systems, the Entry Exit system and ETIAS. Prüm, Passenger Name Records (PNR) and a renewed mandate for EU LISA will also be high on the agenda, as will cooperation between the EU and Ukraine."


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Foreign and Commonwealth Office

BRITISH INDIAN OCEAN TERRITORY

Sir Alan Duncan: On 22 June, the UN General Assembly adopted a resolution at the instigation of Mauritius seeking an Advisory Opinion of the International Court of Justice (ICJ) on the sovereignty of the Chagos Archipelago, which the UK administers as the British Indian Ocean Territory (BIOT). Fewer than half of the General Assembly’s 193 members voted in favour of the resolution (94 countries); 15 voted against it, 65 abstained and 19 did not vote. We are disappointed that this bilateral dispute is being taken to the International Court of Justice. This is an inappropriate use of the ICJ advisory mechanism because it is an attempt to circumvent the principle that no State should be compelled to have its bilateral disputes submitted for judicial settlement without its consent, not least on matters of sovereignty. This is a matter for the UK and Mauritius to resolve bilaterally.We have no doubt about our sovereignty over the Chagos Archipelago, which has been under continuous British sovereignty since 1814. Mauritius has never held sovereignty over the Archipelago and we do not recognise its claim. We have, however, made a long-standing commitment to cede sovereignty of the territory to Mauritius when it is no longer required for defence purposes. We stand by that commitment.We created BIOT for defence purposes and, in 1966, concluded with the United States of America an agreement for joint defence use of the territory. Our current agreement lasts until 2036. We cannot now predict what our defence purposes will require beyond that point. BIOT plays an active role in regional and global security and defence, to the considerable benefit of the UK, US, other allies and regional partners.We have engaged in good faith in discussions to try to resolve the issue bilaterally. The UK Government has made significant proposals to Mauritius which respect and recognise their long term interest in the archipelago. We have offered, without prejudice to our sovereignty, a framework for the joint management, in environment and scientific study, of all the islands of the territory except for Diego Garcia, and we have offered enhanced bilateral security cooperation. These offers were relevant to the dispute and were seriously made. We are disappointed that the Government of Mauritius chose to reject them and to walk away from bilateral talks and instead decided to use multilateral mechanisms.The UN Resolution also mentions the very important matter of the Chagossians. We are currently designing an approximately £40m support package, to improve Chagossian livelihoods in the communities where they now live: in Mauritius, the Seychelles and the UK.The UK will continue to defend robustly our sovereignty over BIOT.On 22 June, the UN General Assembly adopted a resolution at the instigation of Mauritius seeking an Advisory Opinion of the International Court of Justice (ICJ) on the sovereignty of the Chagos Archipelago, which the UK administers as the British Indian Ocean Territory (BIOT). Fewer than half of the General Assembly’s 193 members voted in favour of the resolution (94 countries); 15 voted against it, 65 abstained and 19 did not vote. We are disappointed that this bilateral dispute is being taken to the International Court of Justice. This is an inappropriate use of the ICJ advisory mechanism because it is an attempt to circumvent the principle that no State should be compelled to have its bilateral disputes submitted for judicial settlement without its consent, not least on matters of sovereignty. This is a matter for the UK and Mauritius to resolve bilaterally.We have no doubt about our sovereignty over the Chagos Archipelago, which has been under continuous British sovereignty since 1814. Mauritius has never held sovereignty over the Archipelago and we do not recognise its claim. We have, however, made a long-standing commitment to cede sovereignty of the territory to Mauritius when it is no longer required for defence purposes. We stand by that commitment.We created BIOT for defence purposes and, in 1966, concluded with the United States of America an agreement for joint defence use of the territory. Our current agreement lasts until 2036. We cannot now predict what our defence purposes will require beyond that point. BIOT plays an active role in regional and global security and defence, to the considerable benefit of the UK, US, other allies and regional partners.We have engaged in good faith in discussions to try to resolve the issue bilaterally. The UK Government has made significant proposals to Mauritius which respect and recognise their long term interest in the archipelago. We have offered, without prejudice to our sovereignty, a framework for the joint management, in environment and scientific study, of all the islands of the territory except for Diego Garcia, and we have offered enhanced bilateral security cooperation. These offers were relevant to the dispute and were seriously made. We are disappointed that the Government of Mauritius chose to reject them and to walk away from bilateral talks and instead decided to use multilateral mechanisms.The UN Resolution also mentions the very important matter of the Chagossians. We are currently designing an approximately £40m support package, to improve Chagossian livelihoods in the communities where they now live: in Mauritius, the Seychelles and the UK.The UK will continue to defend robustly our sovereignty over BIOT.

Department for Business, Energy and Industrial Strategy

EU FOURTH ANTI MONEY LAUNDERING DIRECTIVE: AMENDMENTS TO UK REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL

Margot James: On Friday, I laid before Parliament two sets of regulations that modify the existing national measures to implement the UK’s transposition of Article 30 of the EU Fourth Anti Money Laundering Directive. These regulations are made under powers under section 2(2) of the European Communities Act. The regulations modify and extend the UK regime for a public register of information about people with significant control over UK companies and limited liability partnerships (LLPs). The register is a core element of the UK’s drive to improve corporate transparency. This statement, the Regulations and the guidance have been informed by responses received to the discussion paper Implementing the Fourth Money Laundering Directive: transposition of Article 30: beneficial ownership of corporate and other legal entities[1]. Specifically, the regulations:- modify the existing national measures in relation to the legal entities covered (companies, LLPs and SEs) by requiring information to be updated on the register within a prescribed timescale.- extend the amended measures to Unregistered Companies and listed companies on UK secondary markets.- apply a modified form of the regime to limited partnerships governed by the law of Scotland and to qualifying general partnerships governed by the law of Scotland, collectively known as “eligible Scottish Partnerships”.- amend the provisions on circumstances in which information not shown on the public register may be accessed. Transposition is not required in relation to limited or general partnerships registered or formed under the law applicable elsewhere in the United Kingdom, in view of the distinct legal status of Scottish partnerships in section 4 of the Partnership Act 1890. I have also issued and published, in draft, updated statutory guidance on the meaning of significant influence or control in the context of companies, for the register of people with significant control. This is required by paragraph 24 of Schedule 1A of the Companies Act 2006, and is subject to negative resolution by either House. The term ‘significant influence or control’ is included in the fourth and fifth specified conditions for being a person with significant control. The statutory guidance is required to explain how that term should be interpreted. I have also published guidance on the meaning of significant influence or control in the context of eligible Scottish partnerships and have updated guidance on the regime for all legal entities in scope and for people who might become a person of significant control over them.  [1] https://www.gov.uk/government/consultations/implementing-the-fourth-money-laundering-directive-beneficial-ownership-register 


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Proposed Richborough Connection and East Anglia THREE Offshore Wind Farm Energy Infrastructure Projects

Richard Harrington: This statement concerns applications made by National Grid Electricity Transmission plc and East Anglia THREE Limited under the Planning Act 2008 for development consent for the installation, operation and maintenance of a 400kV high voltage Overhead Electric Line between Richborough and Canterbury in Kent (“the Richborough Connection Project”) and the construction, operation and maintenance of an offshore wind generating station off the coast of Suffolk with related onshore works (“the East Anglia THREE Offshore Wind Farm”) respectively. Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of receipt of the Examining Authority’s report unless exercising the power under section 107(3) to set a new deadline. Where a new deadline is set, the Secretary of State must make a Statement to Parliament to announce it. The deadline for the decision on the Richborough Connection Project was 8 June 2017 while the deadline for the East Anglia THREE Offshore Wind Farm is 28 June 2017. The Secretary of State has decided to set a new deadline for deciding the two applications of 8 August 2017. The decision to set the new deadline for these applications is without prejudice to the decisions on whether to grant or refuse development consents for them.


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